Reply to: Need some advice on Composite companies please

[KLM]

Oh I dont use Safe Solutions which appears to be a good thing from the earlier comment. I use a company called Hexagon / Lyncott? Thanks for the advice I will ask them.

Best Regards,
Karen

[Darren@UptonAccountants]

taxes

I think you need to speak to Safe Solutions or dig out the dividend vouchers and a P60 to see how much you've received.

[KLM]

Thanks for that - so if I go over 40% then I need to make additional tax payments? Do you know how that is calculated i.e. between 19% corporation tax nett amount and the actual amount I get paid? I assume I only pay any additional amount of tax on the amount over and above the threshold?

I think I've confused myself!!!

K

[Darren@UptonAccountants]

HR Tax

Hi folks,

I read this with interest. I use the above company and get paid a small salary which I pay tax and NI on and then pay 19% corporation tax on the balance of my monthly earnings.

Whilst I have been contracting on and off for a while I have never really got the bottom of what I should and shouldn't do.

Is the above correct or do I fall into the same category i.e. I should be paying additional tax (above 19%) on the balance of my earnings?

I have spent a lot of time moving back and forth between the UK and Spain, where I lived for 4 years and until this contract wasn't particularly worried (from a tax perspective) as I didn't ever work long term in the UK.

However, having been on this contract for the time I have and reading this post it has made me wonder?

Apologies if this sounds naive but you have to start somewhere.

Thanks,
Karen

If you're a basic rate tax payer, there's no further tax to pay...if your income including salary, divi's, etc goes into the higher rate then yes, you should be paying additional tax on your earnings.

[KLM]

Hexagon / Lyncott

Hi folks,

I read this with interest. I use the above company and get paid a small salary which I pay tax and NI on and then pay 19% corporation tax on the balance of my monthly earnings.

Whilst I have been contracting on and off for a while I have never really got the bottom of what I should and shouldn't do.

Is the above correct or do I fall into the same category i.e. I should be paying additional tax (above 19%) on the balance of my earnings?

I have spent a lot of time moving back and forth between the UK and Spain, where I lived for 4 years and until this contract wasn't particularly worried (from a tax perspective) as I didn't ever work long term in the UK.

However, having been on this contract for the time I have and reading this post it has made me wonder?

Apologies if this sounds naive but you have to start somewhere.

Thanks,
Karen

[Technically Blonde]

I've been with Safe Solutions for a few weeks, everything's OK so far, despite them going into administration a couple of weeks ago!

George

I would strongly suggest that anyone thinking of going with Safe Solutions check their scheme with the Revenue first

[Technically Blonde]

No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

must only be a basic rate taxpayer then. As soon as you earn more than the basic rate band limit (including the grossed up divis) you have to pay tax on the divis

[boredsenseless]

No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

Strangely enough he doesn't ever ask for them until he feels like it, it is yours and in this case your mates job to disclose these. I suggest he does as they have a habit of knocking on the last day they can legally investigate and asking for a lot of money very quickly.

It's because of tw@ts like that that the whole IR35 rubbish originally got spawned.

[monkeygeorge]

Safe Solutions

I've been with Safe Solutions for a few weeks, everything's OK so far, despite them going into administration a couple of weeks ago!

George

[rooney]

Umbrellas

Unless Parasol have just launched a composite scheme they just operate a PAYE umbrella. There are a few who do composite although for some reason the majority operate in non IT sectors. Brookson in engineering, Gabem in construction and as previously mentioned PCL in aircraft. There are some specialist IT firms who operate it but they seem to backing away on this at the moment and I'm not sure why. No doubt it will be one of 2 factors: they aren't making any money on it OR the IR is sqeezing them.

[marty_boy]

Parasol Composite

If you're hell-bent on using a composite, it's probably best to keep away from anyone with a number in their name - common opinion around here is to talk nicely to Parasol, who provide both composite and umbrella options but there are others.

Hi - I've signed up with Parasol (First contract) but I see no mention of a composite solution on there website ? Just wondering if anyone has any first hand experience of Parasols composite solution ?

Re: There's a thought...

No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

Re: There's a thought...

remember that Hector will want his cut of those Divis at the end of the year

Re: There's a thought...

Thanks malvolio & appreciate the helpfull advice.

I have just been talking with Brookson, who are recommended on here in the directory list, they seem really professional & are giving me 83% of my gross, but I fully take on board what you say about the investigations.

There's a thought...

Use an umbrella and be outside IR35...

It's your call, but look at using a Ltd Co - it's really not that difficult and actually pays a bit more than anything else, because you get to work with all the money rather than giving a percentage to someone else.

If you're hell-bent on using a composite, it's probably best to keep away from anyone with a number in their name - common opinion around here is to talk nicely to Parasol, who provide both composite and umbrella options but there are others.

It might be a good idea to do some research on how it all works, which might save you getting stung! And the other small point is that Hector seems more and more to be targetting people who take the low salary/high dividend route for special attention - and you really do not want to get in front of an IR35 investigation, even if you're well outside the boundary!